Genesis Global Trading Agrees to $8 Million Settlement, to Cease Operations in New York

by Jared Kirui
  • NYDFS' investigation exposed lapses in the company's anti-money laundering processes.
  • Genesis Global Trading will surrender its BitLicense.
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Genesis Global Trading has agreed to a settlement with the New York Department of Financial Services (NYDFS). The company, known for its crypto lending services, will pay a fine of $8 million, relinquish the BitLicense obtained in 2018, and cease all operations in New York.

This decision comes in the wake of an investigation by New York authorities, exposing flaws in Genesis' anti-money laundering and cybersecurity protocols, rendering the firm susceptible to illicit activities.

The NYDFS' Superintendent Adrienne Harris mentioned: "DFS's virtual currency and cybersecurity regulations are often cited as the gold standard, providing clear and stringent requirements to protect consumers and safeguard institutions from bad actors."

Genesis Global Trading Faces Regulatory Scrutiny

"Genesis Global Trading's failure to maintain a functional compliance program demonstrated a disregard for the Department's regulatory requirements and exposed the company and its customers to potential threats."

The DFS' investigation pointed to flaws in crucial areas, such as the Bank Secrecy Act, anti-money laundering compliance, transaction monitoring, Suspicious Activity Report filings, Office of Foreign Assets Control screening, and cybersecurity.

Licensed in 2018, Genesis Global Trading operated under the purview of the NYDFS. However, the latest settlement necessitates that the company surrender its BitLicense.

Last year, Genesis Global Trading announced the closure of its US-focused spot crypto trading operations. This decision, conveyed to clients through email, took effect on September 30, 2023. It followed Genesis Global Trading's legal disputes with FTX. Clients were advised to settle all trades by September 21, 2023, with any remaining accounts set to be closed. The official statement attributed this move to voluntary reasons related to the overall business strategy.

Genesis Global Trading's Legal Battles

Amid the closure of operations, GGC International Limited, an entity affiliated with Genesis, continued operating Genesis Global Trading's spot and derivatives trading services. Notably, Genesis Global Trading managed to escape Genesis Global's financial troubles.

However, the legal hurdles facing Genesis Global Trading do not end there, as the company and its Founder, Barry Silbert, face a lawsuit from Gemini. The cryptocurrency exchange alleged fraudulent activities related to a digital asset lending platform operated by both companies.

In the broader crypto landscape, Genesis Global and Gemini faced legal action from the SEC in January last year for allegedly offering unregistered securities through their crypto lending product. Additionally, a class-action lawsuit initiated by investors against Gemini concerning the Gemini Earn Program adds complexity to the legal challenges faced by these entities.

Genesis Global Trading has agreed to a settlement with the New York Department of Financial Services (NYDFS). The company, known for its crypto lending services, will pay a fine of $8 million, relinquish the BitLicense obtained in 2018, and cease all operations in New York.

This decision comes in the wake of an investigation by New York authorities, exposing flaws in Genesis' anti-money laundering and cybersecurity protocols, rendering the firm susceptible to illicit activities.

The NYDFS' Superintendent Adrienne Harris mentioned: "DFS's virtual currency and cybersecurity regulations are often cited as the gold standard, providing clear and stringent requirements to protect consumers and safeguard institutions from bad actors."

Genesis Global Trading Faces Regulatory Scrutiny

"Genesis Global Trading's failure to maintain a functional compliance program demonstrated a disregard for the Department's regulatory requirements and exposed the company and its customers to potential threats."

The DFS' investigation pointed to flaws in crucial areas, such as the Bank Secrecy Act, anti-money laundering compliance, transaction monitoring, Suspicious Activity Report filings, Office of Foreign Assets Control screening, and cybersecurity.

Licensed in 2018, Genesis Global Trading operated under the purview of the NYDFS. However, the latest settlement necessitates that the company surrender its BitLicense.

Last year, Genesis Global Trading announced the closure of its US-focused spot crypto trading operations. This decision, conveyed to clients through email, took effect on September 30, 2023. It followed Genesis Global Trading's legal disputes with FTX. Clients were advised to settle all trades by September 21, 2023, with any remaining accounts set to be closed. The official statement attributed this move to voluntary reasons related to the overall business strategy.

Genesis Global Trading's Legal Battles

Amid the closure of operations, GGC International Limited, an entity affiliated with Genesis, continued operating Genesis Global Trading's spot and derivatives trading services. Notably, Genesis Global Trading managed to escape Genesis Global's financial troubles.

However, the legal hurdles facing Genesis Global Trading do not end there, as the company and its Founder, Barry Silbert, face a lawsuit from Gemini. The cryptocurrency exchange alleged fraudulent activities related to a digital asset lending platform operated by both companies.

In the broader crypto landscape, Genesis Global and Gemini faced legal action from the SEC in January last year for allegedly offering unregistered securities through their crypto lending product. Additionally, a class-action lawsuit initiated by investors against Gemini concerning the Gemini Earn Program adds complexity to the legal challenges faced by these entities.

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